Problem # 4 On June 1, 2017, Nyland Company purchased for $2,000,000 snow-making equipment having an...
Problem # 4
On June 1, 2017, Nyland Company purchased for $2,000,000 snow-making equipment having an estimated useful life of 5 years with an estimated salvage value of $800,000. Depreciation is taken for the portion of the year (the number of months) the asset is used during that year. Nyland’s fiscal year ends on December 31.
Instructions
(a) Record the adjusting entries for depreciation for 2017 and 2018 using the straight-line method.
(b) Record the adjusting entries for depreciation for 2017 and 2018 using the double-declining balance method.
Homework Answers
Straight lines depreciation = (2000000-800000)/5 = $240000
Double deciling depreciation rate = 5 years = 40%
a.
| Date | Accounts | Debit | Credit |
| 2017 | Depreciation expense (240000*7/12) | 140000 | |
| Accumulated depreciation | 140000 | ||
| 2018 | Depreciation expense | 240000 | |
| Accumulated depreciation | 240000 |
b.
| Date | Accounts | Debit | Credit |
| 2017 | Depreciation expense (2000000*40%*7/12) | 466667 | |
| Accumulated depreciation | 466667 | ||
| 2018 | Depreciation expense (2000000-466667)*40% | 613333 | |
| Accumulated depreciation | 613333 |
Add Answer to:
Problem # 4
On June 1, 2017, Nyland Company purchased for $2,000,000
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Testbank Problem 134
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Complete the form below by determining the depreciation expense
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2.
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On July 1, 2020, Blue Spruce Company purchased for $6,660,000
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Complete the form below by determining the depreciation expense
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1.
sum-of-the-years'-digits method.
2.
double-declining balance method.
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Testbank Problem 134
On July 1, 2020, Novak Company purchased for $5,040,000
snow-making equipment having an estimated useful life of 5 years
with an estimated salvage value of $210,000. Depreciation is taken
for the portion of the year the asset is used.
Complete the form below by determining the depreciation expense
and year-end book values for 2020 and 2021 using the
1.
sum-of-the-years'-digits method.
2.
double-declining balance method.
2020
2021
Sum-of-the-Years'-Digits Method
Equipment
$5,040,000
$5,040,000
Less: Accumulated Depreciation
$
$...
Testbank Problem 134
On July 1, 2020, Blue Spruce Company purchased for $6,660,000
snow-making equipment having an estimated useful life of 5 years
with an estimated salvage value of $277,500. Depreciation is taken
for the portion of the year the asset is used.
Complete the form below by determining the depreciation expense
and year-end book values for 2020 and 2021 using the
1.
sum-of-the-years'-digits method.
2.
double-declining balance method.
2020
2021
Sum-of-the-Years'-Digits Method
Equipment
$6,660,000
$6,660,000
Less: Accumulated Depreciation
$...
On July 1, 2020, Swifty Company purchased for $6,120,000 snow-making equipment having an estimated useful life of 5 years with an estimated salvage value of $255,000. Depreciation is taken for the portion of the year the asset is used. Complete the form below by determining the depreciation expense and year-end book values for 2020 and 2021 using the 1. sum-of-the-years'-digits method. 2. double-declining balance method. 2020 2021 Sum-of-the-Years'-Digits Method Equipment Less: Accumulated Depreciation $6,120,000 $6,120,000 Year-End Book Value $6,120,000 $6,120,000...
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